The Massachusetts Bay Colony found itself in an economic crisis when the Great Migration of the 1630s from England to the American colonies ended. As fewer ships came to New England, iron products became scarcer and more expensive. In 1641 the General Court of the Massachusetts Bay Colony enacted an ordinance for "encouragement to discovery of mines." By this legislation, anyone discovering mineral deposits in the colony would possess exclusive rights for 21 years. Colonists could buy land from Native Americans and, with the permission of the owners, could prospect for ore and develop mines on lands already held by settlers. The loss of a steady source of iron products from England and the discovery of iron ore precipitated a major industrial enterprise.

John Winthrop, Jr., son of the colony’s governor, was particularly interested in developing an iron industry in Massachusetts. Educated at Trinity College in Dublin, Ireland, Winthrop had studied law and read widely in the sciences. He experimented in alchemy (an attempt to turn base metals into gold), medicine, and metallurgy. In 1641 he sailed to England to seek investors in a plan to start an ironworks in America. By 1643 Winthrop had found about two dozen men willing to invest in a "Company of Undertakers of the Iron Works in New England." Returning to the Massachusetts Bay Colony that year with a necessary team of skilled workmen, Winthrop established an ironworks along the Saugus River that operated from 1646 to 1668. In effect, he created the foundation for the American iron industry.

Some 300 years later, in 1948, the site where this ironworks had been established was excavated under the direction of archeologist Roland Wells Robbins. He and his crew found foundations of the buildings, remains of the holding ponds and the canal, half of the original blast furnace waterwheel and wheel pit, and more than 5,000 artifacts ranging from a 500-pound hammerhead to brass pins. As a result of the archeological evidence and historical documents that were found, the American Iron and Steel Institute decided to fund a reconstruction of the ironworks. The reconstructed site, based partly on conjecture, opened to the public in 1954. In 1968 the site became a unit of the National Park Service.